France says oil companies could face 'exceptional' tax

Paris (Platts)--9Sep2005

French economy minister Thierry Breton is considering raising an
"exceptional" tax on oil companies, including Total, by 2006, unless they
propose "concrete" plans to redistribute profits in favor consumers, the
ministry said Friday.

     The move would force Total and others to return to consumers some of the
gains they have made on the back of the recent surge in oil prices, the
ministry said.

     "Thierry Breton said that the oil company sector has benefited from
exceptional profits because of the rise in oil prices, and that the companies
should return some of these profits not just to shareholders but also to
clients," a ministry spokesman said. "This should translate to a reduction in
pump prices and an increase in investment, including in renewable energies,"
he added. "If the companies, for example Total, Shell and BP, do not make
concrete proposals, the minister does not exclude raising an exceptional tax
by 2006," he added.

    The ministry was unable to say how much tax it was considering raising
from the oil companies. Breton has given the oil company sector one week to
come up with "concrete" plans to help consumers, the ministry spokesman said.
Breton is scheduled to meet oil sector representatives next Friday.
   The French government, which has ruled out any changes to the TIPP tax it
takes on gasoline, is under growing pressure from the French public and
professionals, including lorry drivers and others, to do more to help 
consumers. 

     France has seen unleaded petrol rise 13.4% in the past twelve months to
1.33 euros a litre.

     Total, which made a record Eur9-bil profit in 2004, said it would  
not comment before Friday's meeting. A spokeswoman said there was "not  much 
room for manoeuvre" as the company was only making an extra Eur1 centimes per
litre profit on the distribution of gasoline after refining. She  pointed to 
Total's plans for "massive investment in refining" over the next five years, 
including Eur1.5-bil for at its six French refineries, as evidence of its 
efforts to help the situation.

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